The simple version

Walmart reported on Thursday morning, August 20, and its shares closed down about 9%, the steepest single-day decline since 2022. United States comparable sales grew 2.6%, against 4.6% in the same quarter a year earlier.

Ross Stores reported after the close the same day. Comparable store sales rose 10%, primarily driven by customer traffic, and the shares closed up about 4% the following session.

Both companies raised full-year guidance, and so did Target, which had reported the day before. The divergence was not in the direction of the outlooks. It was in how much the stores that already existed managed to sell.

The numbers

• Walmart reported on August 20. Walmart U.S. comparable sales grew 2.6%, against 4.6% in the same quarter a year earlier (Walmart)
• That 2.6% splits into transactions up 1.5% and average ticket up 1.1%. A year earlier transactions were also up 1.5%, and average ticket was up 3.1% (Walmart)
• Walmart raised its full-year outlook to net sales growth of 4.0% to 5.0% and adjusted operating income growth of 7.0% to 8.5%, both in constant currency (Walmart)
• Walmart shares closed down 9.2% on August 20, the steepest single-day decline since May 2022 (market data)
• Ross Stores reported after the close on August 20. Total sales rose 13% and comparable store sales rose 10%, primarily driven by customer traffic (Ross Stores)
• Ross raised full-year earnings guidance to a range of $8.61 to $8.77 per share. Its shares closed up 4.4% on August 21 (Ross Stores, and market data)
• Target reported on August 19. Comparable sales grew 3.8%, driven by a 3.6% increase in comparable traffic, and the company raised its full-year outlook (Target)
• Home Depot reported on August 18. Revenue rose 5.7% and comparable sales rose 1.7%, a four-point gap (Home Depot, and our earlier coverage)
• Target recorded $994 million of pretax tariff refunds in the quarter and Ross recorded about $253 million. Walmart disclosed receiving tariff refunds without stating an amount (Target, Ross Stores, and Walmart)
• United States retail sales fell 0.6% in July from the prior month to $763.6 billion, while running 5.0% above July 2025 (U.S. Census Bureau, released August 14, 2026)

Two models, one shopper

A conventional retailer plans its assortment. It decides months ahead what it will carry, orders it, prices it, and sells it. Everyday low pricing is a promise about the price of a known item you came in to buy.

The off-price model runs the other way around. It buys inventory opportunistically, taking closeouts, cancelled orders, and overstock, so the assortment is largely whatever it managed to acquire. The promise is not that a specific item will be cheap, but that whatever is on the rack costs less than it did elsewhere.

That difference decides which format gains when households look harder at prices. A household holding its total spending steady while trying to get more per dollar is not necessarily buying less. It is buying differently.

It also explains why traffic is the number to watch at an off-price chain. The proposition only works if people keep coming in to see what arrived.

Where Walmart's slowdown actually came from

Comparable sales decompose into two pieces: how many transactions there were, and how much the average one was worth. Walmart disclosed both, and the split is the most informative thing in the report.

Transactions grew 1.5%, exactly as they did a year earlier. Average ticket grew 1.1%, against 3.1% a year earlier. All of the slowdown sits in the ticket, and none of it in the number of visits.

Part of that is a price effect rather than a behavior effect. Walmart disclosed a 125 basis point headwind to its United States comparable sales from pharmacy deflation tied to a new maximum fair price regulation effective January 1.

Falling prices shrink the dollar value of a basket without anyone putting less in it. A smaller average ticket is not automatically a smaller cart, which is the same distinction between dollars and goods that runs through the national retail sales data.

The one-time item running through all of it

Three of these reports contain a large benefit that has nothing to do with shoppers. Tariff refunds landed in the quarter, and they are big enough to change how the profit figures read.

Target recorded $994 million of pretax tariff refunds. Ross recorded about $253 million, which it said accounted for 405 of the 610 basis points of operating margin improvement in the quarter. Walmart disclosed refunds without giving a figure and said it is directing them into price investments.

Walmart went further and told investors to consider the second and third quarters together to assess the underlying growth of the business. That is a company saying, in its own release, that one quarter read alone will mislead you.

This is why the comparable sales lines carry more signal here than the earnings lines. Comps describe what happened in the stores. A tariff refund describes what happened at customs.

The Real Cost lens on shopping the same budget differently

The household version of what these companies reported is worth sizing, with every input stated as an assumption rather than a measurement.

• On a stated $600 a month of household goods spending, shifting a fifth of it to items bought at a stated 30% discount saves about $36 a month
• That is roughly $432 over a year, on the same quantity of goods, from changing where rather than how much
• The tradeoff is selection and consistency, because an opportunistic assortment means the specific item you want may not be there
• None of that is a shopping recommendation, and the figures are illustrations rather than measured savings

That is the whole story compressed. A household that trades down is not necessarily spending less, which is why total spending can hold while the companies capturing it change, and why one week can produce two opposite-looking headlines about the same people.

What this means

When retail earnings cluster in one week, the useful move is to read them against each other rather than one at a time. A single company's results describe that company. Several companies' results, sorted by business model, describe where money is moving.

Two habits do most of the work. Find the comparable sales line before the revenue line, and check whether a one-time item is doing the heavy lifting in the profit figures.

The durable idea is that aggregate spending and individual company results answer different questions. Total retail sales fell in July from the prior month while running 5.0% above the year before, and several large retailers grew through the same period. All of those numbers can be accurate at once.

What this is NOT

This is not advice to buy, sell, or hold any company mentioned or any security or fund, and the retailers named appear as dated factual examples rather than as recommendations. This is not a judgment about whether any company's results were good or its stock attractive. This is not a claim that the American consumer is strong or weak, which is a genuine disagreement among analysts that this article does not settle. This is not shopping advice, and the household figures are stated illustrations rather than measured savings. This is not a prediction of any company's results, of retail sales, or of the economy. Company figures come from their own releases, retail sales figures from the Census Bureau, and share price moves from market data on the dates given. This is not investment or financial advice of any kind.

Sources

• U.S. Census Bureau, Advance Monthly Sales for Retail and Food Services, July 2026 (released August 14, 2026): https://www.census.gov/retail/index.html
• Walmart Inc., second quarter fiscal 2027 earnings release (August 20, 2026): https://stock.walmart.com/
• Ross Stores, Inc., second quarter fiscal 2026 results, Form 8-K exhibit 99.1 (August 20, 2026): https://www.sec.gov/Archives/edgar/data/0000745732/000074573226000038/q226exhibit991.htm
• Target Corporation, second quarter earnings release (August 19, 2026): https://corporate.target.com/press/release/2026/08/target-corporation-reports-second-quarter-earnings
• U.S. Securities and Exchange Commission, EDGAR full-text search: https://www.sec.gov/edgar/search/